Standard & Poor's Ratings Services said Zurich Financial Services remains on CreditWatch negative pending the successful implementation of its rights issue.
The ratings of ZFS were lowered to A+ and placed on CreditWatch following the group's announcement that it will increase its net non-life reserves by $2 billion following a third-party actuarial review, write down asset values by $1 billion, and incur restructuring charges of about $500 million in the second half of 2002.
These actions will put significant strain on the group's already reduced risk-based capitalization. ZFS, however, also announced plans to implement a significant capital and operational improvement program to rebuild its balance sheet strength and enhance its net income in 2003 by an additional $1 billion. The successful completion of the rights issue is one of the cornerstones of this program.
